An already at-times tense relationship between the PCB and the Pakistan Super League (PSL) franchises has grown a little worse, with the Pakistan board erroneously revealing franchises' financial details to each other. It was an embarrassing enough slip-up for the PCB chairman Ehsan Mani to issue an apology to the franchises on behalf of the board.
The issue stemmed from efforts already underway to change the PSL's financial model - brought about because franchises are concerned at having not yet broken even on their investments. The PCB had asked for the financial details of each of the franchises, with a view to sending them to the Pakistan government in a bid to gain tax exemptions for the franchises.
A document with the consolidated details was sent to the franchises themselves, causing the furore.
Now each franchise has the details of the others' incomes, expenses and losses, a serious breach of trust. "We are competitors to each other on the business front, how can the PCB reveal this financial data, this is totally unfair," a team owner said. "We cannot do anything at this stage, but we will be careful next time when it comes to trusting the PCB."
One major aspect of the remodel is the PCB's request to the federal government for a 10% exemption on holding tax, and the Punjab government for 16% exemption on sales tax. For this, the PCB required each team to submit their accounts, which it would then send to the government to build up their case. The PCB did make an official request for exemption in writing to the government.
However, after that, the PCB's chief operating officer Subhan Ahmed shared the document with the franchises too. The document included all the amounts spent on running the team and marketing, among other things. In a meeting in Lahore on December 5, the franchises questioned the move.
Over the last couple of seasons, the franchises have raised concerns over the amount of tax they have had to pay on top of their franchise fees and other operational expenses. The first set of commercial and sponsorship rights deals the PSL signed when it launched have now ended, and with enhanced deals now being inked in - as well as the scare caused by Multan Sultans' financial meltdown - the remaining five franchises have sensed this is time to push for better deals for themselves.
*All the franchises and the PCB have agreed on taking the legal route to gain tax exemptions. Salman Iqbal, the Karachi Kings owner, took the lead and filed an affadavit to launch a petition in court, aiming for the grant of a stay order against the government taxes.
Tax exemptions from the government, though, are unlikely to be okayed this season. The Najam Sethi-led PCB had also tried to get tax benefits for the PSL but failed.
The five franchises have also asked the PCB for an increase in their shares in the central revenue pool, to cover their losses. For the first three years, the PCB put 85% of the PSL's media rights revenue, 50% of the title sponsorship rights money, and 50-60% of the gate money into a central pool, which was then shared out equally among the franchises. The sale of TV rights this year, which is estimated to be in the region of USD 40 million, could be a leg-up for the franchises, given they will each be entitled to an equal share of 85% of that amount.
December 15, GMT 0745 *The story was updated to include this paragraph.